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From: norm@mtgzy.UUCP (XMRN60000[bsm]-n.e.andrews)
Newsgroups: sci.electronics,comp.arch
Subject: Re: GATT declares U.S. - Japan chip pact illegal
Message-ID: <3549@mtgzy.UUCP>
Date: 8 Apr 88 20:02:46 GMT
References: <2441@unicus.UUCP> <1259@hubcap.UUCP> <228@dkstar.UUCP> <21051@amdcad.AMD.COM>
Distribution: na
Organization: AT&T, Middletown NJ
Lines: 89
Summary: One reason why Japanese businesses have an advantage

I suppose I'll get some flak for posting this response to the
sci.electronics and comp.arch newsgroups, but in a sense it is
justified that I post here.  We in the electronic and computer
industries have got to get smarter, and have to help other to get
smarter, about the political and economic activity that affects
our jobs, our businesses, our lives.  Toward that end, I post the
following observations:

In article <21051@amdcad.AMD.COM>, phil@amdcad.AMD.COM (Phil Ngai) writes:
> In article <5333@pyr.gatech.EDU> ccasttd@pyr.UUCP (Thomas M. Dixon Jr.) writes:
> >Do we really want to be a part of the "World Economy"?  I would like to think
> >of that.  If the US becomes part of the world economy, we all become members.
> >That means that after everything equalizes out, the average salary in the US
> >will be a lot closer to the world average.  And that ain't much, I'll tell you.
> 
> You're assuming that it's a win/lose game. That for others to do better,
> we have to do worse. But that is not so. The whole purpose of trade is
> for the people who do something best to be able to concentrate on it.
> 
> How productive would you be if you had to build your own computer
> before you can program it? Sure I pay money to Compaq or whoever, but
> I get much more than my money's worth. 
> 
> When everything equalizes out, everyone should be much better off an
> an absolute scale. If the Japanese are better off on a relative scale
> because American don't work as hard, well that's life. 
> 
> 

For many years the Japanese workers had a much higher per capita savings
rate than American workers, perhaps triple.  Although lately I
think it has dropped off considerably.  The disparity between US
and Japanese savings rates may well have been because Japan did not 
spend heavily on national defense, while the US underwrote the
defense costs for Europe, Japan, and others.

The consequence of a higher savings rate is a higher availability
of money for capital investment.  Outmoded or obsolete machinery
gets replaced much faster with the latest and greatest capital
equipment.  Labor has to compete more intensely with capital or
production machinery such as robotics.

The heavily taxed US economy also experienced several decades of
inflation caused by government-sponsored expansion of the money
supply.  This high rate of inflation was also a dis-incentive for
investment, especially in producers goods.  The US economy has
also been heavily regulated.  Antitrust laws were written so as
to protect established businesses.  Tax laws were written to
favor large scale integration which otherwise wouldn't be
reasonable.  Depreciation scales encouraged holding on to
equipment that was not yet fully depreciated.  Monopolies were
granted thru special government regulations, favoring established
power, transportation and communications businesses, and
discouraging new entrants.  Labor laws discouraged productivity.

Management has also become short-sighted, expecting quick returns
for quick fixes.

Anti-business attitudes abound in the media for years.  Some of
it is justified, since the so-called capitalists aren't
capitalists anymore.  The mixed economy has favored fascists and
socialists, leaving true laissez-faire or free market types
to disappear.  Corruption has been encouraged by allowing
government to decide who gets to do what, and at what cost.

It is time to put a stop to this.  Attempts at political action
are likely to work sporadically, and at great cost of effort.
However political involvement appears necessary.  Long term,
there has to be a cultural change.  People have to be willing to
pay for success.  Quick profits at the expense of long-range
investment will have to stop.  Paying for poor management has to
stop.  Subsidizing substandard workers and coddling unions has to
stop.  Welfare must be replaced by charity - tax theft for redistribution
of income must stop.

If American people fail to limit the power of their government,
if they fail to reform their politics, business, and culture, the
world is lost.  Future generations (and soon to retire workers) will pay...

And that applies to high-paid electronics and computer engineers,
as well.

Norm Andrews
AT&T Information Systems
Room MT-2C402
200 Laurel Avenue
Middletown, New Jersey 07748
(201)957-5786
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